Looking Back at BNEF EMEA Summit, and Into the Distributed Energy Future

This October in London, Bloomberg New Energy Finance hosted their EMEA gathering, the Future of Energy Summit, where theme of the event was “the age of plenty, the age of competition.” With renewables firmly in play with oil and gas – and no longer considered an alternative energy source—it is clear that we are truly living in an age of disruption, from a technological, political and operational point of view. Over the course of the two-day event, Bloomberg analysts, power producers, investors and industry experts gathered to discuss the future of the renewable sector, diving into the challenges and opportunities that lie ahead. Key topics included political impact, financing and investment trends, technological advancements and how new development trends are transforming our industry.

Politics
Michael Liebreich’s words set the bar high for the future of energy in terms of battling climate change. The BNEF founder noted that while we’ve made significant progress over the last five years in decoupling emissions from economy, emissions have since flat lined. The year “2030 is now” said Liebriech, who enforced that in order to meet COP21’s target goal of reducing emissions by 20%, we need to ramp up energy productivity and up the reduced emissions intensity. Policy, sustained investments and digital innovation are all crucial factors in meeting this goal, adding up to the fact that we need to “spend more to get more (GW output) in order to fulfill the promise of the energy sector”, said Liebreich.
With the effects of Brexit starting to weigh in, the increased likelihood of the UK moving towards more centralized power generation and further away from distributed resources was a major concern. With a multitude of policies in place, the need for common policy was stressed to connect Europe’s common energy market. With COP21 goals in mind, efficiency, renewables and interconnectivity were all stated as key to propelling Europe’s clean energy future.

In addition, utility heads with various market factors disrupting their business, called for more regulatory and political consistency. They recognized that renewables are now the most competitive source of energy and they continue to propel the industry with more opportunities, faster time to EBITA, quicker development cycles and broader market adoption. In just the last five years, we’ve seen renewables evolve from an ‘alternative’ to a now mainstream energy source, as Francesco Starace, CEO of Enel Group, recalled. However, market forces are still operating independently, and without the necessary mechanisms in place, it will be difficult for the renewable industry to mature.

Finance
On the finance and investment side, the need for standardization of asset financing was also stressed, with green bond principles serving as a key focal point. While the threshold for what is considered ‘green’ energy and what is not is still being debated, the message was clear that investors need to have a heartfelt commitment to addressing climate change, and not be shortsighted in their concern for quick returns. Standardization in renewable financing at its heart lies in risk management, where lack of transparency and questions pose problems when risks are not clearly defined. For this reason, it was stated that project data integrity is crucial for making smart investment decisions and assessing risk. Balance sheet optimization, contributing to the efficiency and management of market consolidations, refinancing’s and portfolio sales were also key themes.

Technology
While we are living an age of plentiful renewable resources , which are insighting competition, this is truly the age of disruption in the digital era. Nearly all discussions highlighted the importance of digitization, with accurate data management being a key need across assets, processes and customers. While the prospect of leapfrogging years ahead may seem like mission impossible, technology will be the secret weapon in unlocking capital and accelerating investments. This way, we can meet the demand for energy, while reducing emissions and the need for traditional fuel sources –but do so efficiently so that we don’t necessarily have to spend more to get more.
Looking at technological development, advancements in mobility, storage and increased grid flexibility all provided an opportunistic outlook for power efficiency in the years to come. The success of these new investments however, will hinge largely on the ability to have a robust pipeline fueled by accurate project data and sub sequentially, low cost capital.

Regions
From a regional investment perspective, the Middle East and Africa, including Morocco, Jordan and Israel, are looking to be the next hot markets, with an increased need for power consumption fueling new investments. Many eyes are still on Latin America, where reverse power auctions are shaking up the solar industry with their stunningly low bids – and appearing to be the new normal. However, these plays can backfire without strategy and again we heard the need for regulation, where it was agreed that standards need to be set in place in terms of expected rate of returns.

These are the topics that our industry is facing today, as it grapples with growth in the distributed future. The need for digital systems is becoming a clear need to successfully making this transition. As a software provider to the industry, we were proud to be a participating sponsor of the event, with our very own Tim Buchner participating in a panel discussion around the potential for blockchain technology in energy, which you can watch here.